IAB: Digital advertising spending grows 12% against the trend in 2020

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According to a new report commissioned by the Interactive Advertising Bureau by PricewaterhouseCoopers (PwC), although digital advertising spending initially declined due to the epidemic, it has increased by 12.2% year-on-year in 2020. But the report also shows that by 2020, the largest companies in this ecosystem will further consolidate their control of the US digital advertising market, and their market share will increase year by year.

In 2020, the epidemic has reduced advertising budgets, and certain areas such as tourism have remained sluggish throughout the year. But in the second half of 2020, political advertising spending and holiday season sales helped offset losses in the first half of the year, bringing annual revenue to $139.8 billion. However, the growth rate is lower than the 15.9% growth during the period from 2018 to 2019.

The major advertising companies accounted for more market share, even more than in previous years. IAB said that in 2020, the top 10 companies accounted for 78.1% of the revenue share, and the total revenue of this group alone exceeded US$109 billion. In 2018, the top 10 companies accounted for 75.9% of total revenue, which rose to 76.6% in 2019. According to the IAB, companies ranked 11th to 25th accounted for only 6.2% of revenue, while smaller companies combined accounted for 15.7%.

The IAB report stated that expenditures in the second quarter fell 5.2% year-on-year, but expenditures in the third and fourth quarters increased 11.7% and 28.7% year-on-year, respectively. According to the report, digital advertising revenue in the fourth quarter of 2020 set a record for more than 20 years, and the report attributed part of the revenue to pre-election advertising. According to the report, in 2020, social media advertising revenue reached 41.5 billion U.S. dollars, accounting for nearly 30% of Internet advertising revenue. Digital video advertising revenue increased by 20.6% year-on-year, and its share of total Internet advertising revenue increased by 1.3% to 18.7%.

By 2020, programmatic advertising revenue has also increased by 24.9%, reaching 14.2 billion US dollars, but the IAB report questioned whether changes in privacy, such as Google’s no longer using third-party cookies, mean that future growth is unsustainable. The report said: “The changes in consumer identity and classification models announced by Google and Apple will not have a substantial impact in 2020. It is expected that as ecosystem participants and consumers adapt to the new model, it will cause a disruptive turning point.” “The loss and blocking of advertising products, tracking and other functions by identifiers will not immediately have a direct and significant impact, but will be felt over time.”

Regarding large companies including Amazon and Google, the IAB report did not give a specific share. But in another new report this week, eMarketer stated that Amazon’s share of the US digital advertising market will exceed 10% for the first time in 2020. Data from eMarketer shows that in 2020, Google’s share of the US digital advertising market is 28.9%, and Facebook’s share is 25.2%.

In addition, the Pew Research Center reported on Wednesday that YouTube was the fastest-growing social media application among US users during the epidemic. The conclusion comes from a survey of 1,502 American adults between January 25 and February.

According to the survey, the usage rate of Google’s YouTube video service has increased from 73% in 2019 to 81% in 2021. Followed by Reddit, the site’s usage rate among American adults has increased from 11% in 2019 to 18% in 2021. YouTube is especially popular among people aged 18 to 29, with 95% of people saying they use the service. In this age group, 71% said they use Instagram, 70% said they used Facebook, and 65% said they used Snapchat. The usage rate of Facebook among Americans is still high, with 69% of American adults saying they visit this social network. However, data from the Pew Research Center show that this number has remained relatively stable over the past five years. Pew’s report included TikTok and Nextdoor for the first time. According to the report, 21% of Americans use TikTok and 13% use Nextdoor.

Likewise, If your company or brand has plans or is developing a potential Chinese market, digital advertising is an irreplaceable mainstream marketing method. We can provide search engine advertising (Baidu PPC, Baidu SEM), social media advertising (WeChat, Weibo), streaming media advertising, short video (TikTok, Douyin), KOL, etc. to help you increase brand awareness and obtain sales leads. Click to discuss business. 

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